LinnCo is the limited liability company of Linn Energy (LINE).
U.S. oil futures are rising on data from the U.S. Energy Information Administration that showed that crude inventories fell by 5.9 million barrels last week, compared to analysts' expectations of an increase of 1.1 million barrels.
Separately, Baker Hughes (BHI) also released data showing U.S. oil rigs fell by three to 538 versus the 961 rigs that were active a year ago.
LinnCo shares rose 20.2% to $1.19 in intraday trading today.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate LINNCO LLC as a Sell with a ratings score of D-. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 667.9% when compared to the same quarter one year ago, falling from $117.61 million to -$667.95 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, LINNCO LLC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $40.22 million or 56.60% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 92.38%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 671.42% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- LNCO, with its very weak revenue results, has greatly underperformed against the industry average of 36.9%. Since the same quarter one year prior, revenues plummeted by 485.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: LNCO